A home renovation is a great way to add value and satisfaction to your beloved abode. After all, who doesn't love stepping into a new room, a finished basement, or a renovated bathroom?

However, before "undertaking any of the character-building, heavy-lifting labor" there’s the time-consuming and costly process of obtaining renovation permits. How long a permit can be approved depends on the scale of the project. For smaller renovations, it may take as little as 24 hours. Expectedly, larger projects might take longer so homeowners may have a bit of a wait on their hands. So who says it isn’t tempting to save a bit of time and money skipping that step entirely and pushing ahead with your planned renovations?

Well if you do, prepare to face some terrible consequences. Unpermitted work refers to any modifications made to the home that should have been permitted but were not.

Aside from a sunken property value, your biggest risk may lie in the job itself. Without the proper permits, there's no guarantee that your contractors will execute a professional job. The results of this could be disastrous. For instance, if you sell, those substandard improvements might cause you trouble during a home inspection.

It's a nightmare to think about, but it means big trouble if your municipality or city office finds out you’re renovating sans-permits. Some cities will only inspect, but some will issue a stop-work order and may even slap a hefty fine on both the homeowner and contractor. Worse still, the city could order a teardown of the entire project with a subsequent order to redo any work done with the proper permits finally in hand.

Another area of concern is that any unpermitted additions may not be covered, and even violate your insurance policy. It is especially concerning if an accident or disaster occurred in that part of your home. If there's been a house fire caused by faulty wiring due to poor electrical work, or if someone fell and seriously injured themselves you could be facing a costly nightmare.

Filing an insurance claim for a scenario like this could be futile; your policy probably isn't going to cover the issue, additionally, you may be heading towards a complicated, costly lawsuit.

As we mentioned earlier, failing to get permits could cause the value of your home to drop. Why? For starters, real estate information in your local municipality needs to be up to date to help maintain home values and stay current with taxes and insurance. Renovation permits will help ensure that your property keeps up with the latest health and safety standards.

When you sell, an appraiser will assess your home in order to gauge its objective market value. Any unpermitted work brought into concern because of safety defects could depreciate your home's value. Even worse, you could be fined with the appraiser also demanding that the work be removed and redone—this time with proper permits secured. Likewise, any room additions not up to code will be excluded in the square footage stated in your “updated”  home listing. That means buyers will think your home is smaller than it really is.

Notwithstanding the huge laundry list of features and amenities potential buyers look for in a new home, above all is a safe and secure place. Should they discover the house they're looking at has undergone an unpermitted structural remodel, it can imbue them with uncertainty, causing a loss of confidence in your property, and resulting in some serious purchase reconsiderations.

The buyer might think you hired someone unqualified to do the work because you didn’t even bother getting permits. They may feel that the completed renovation is unsafe, leaving them clouded with worry about long-term problems down the line. A good buyer’s agent is going to make sure that permits were pulled on any significant additions done to the property, so there’s no escaping the consequences. However, if permits were secured for the renovations, concerns like these all go out the window, with the buyer immediately given peace of mind and assurance, enticing them to make a good and reasonable offer.

Well, it might be overreacting, but not getting permits for a significant modification or addition can stop a home sale. Wait, what?

You heard right! Once your home has entered the market, a subsequent home inspection and appraisal will follow as is required by the selling process. The inspector will ensure that buyers know exactly what they're getting while the appraiser will look to protect the interests of the bank or lending institution, ensuring proper standards are met before they approve the loan. Both professionals can easily request public records on your home, including the permits (or lack thereof) for any improvements made, assuring that the property is not only habitable but in good working order.

It could cost you the home sale if the bank doesn’t want to fund the loan because the appraiser’s requests were not met, or if the potential buyer backed out due to personal uncertainty with regard to property safety and structural integrity.  

Admittedly, securing a renovation permit can be a hassle. You have to provide your local municipality with your detailed plans for the remodel, as well as additional documentation if needed. Moreover, permits come with corresponding fees.

However, proceeding to push through with a renovation without proper paperwork can lead to dire consequences, as discussed above. The commonalities shared by those risks are time wasted, money squandered and maybe a forthcoming lawsuit. Not to mention, most likely you'd also be required to undo all the work done, taking you and your home back to square one on what could have been a great addition.

Tips:

• Know what renovations require permits. Any substantial, structural, or significant remodel requires the homeowner or seller to get a permit. These major renovations could include electrical or plumbing work, basement refurbishment, or room addition. However, if you are only updating or sprucing up an existing space, then permits might not be necessary.

• Consult with your city building committee. However, building codes and the legal requirements to pull a permit vary with every city. With this in mind, it's important to check with your local municipality or city building code committee to make sure there won’t be any problem before you tear down a wall or remodel anything.

• Hire only licensed and reputable contractors. You can rest assured that they won't work without securing proper permits, giving you peace of mind that their work will be up to code.